Dollar General Corp (NYSE:DG) stock fell 1.70% (As on December 8, 11:04:10 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the third quarter of FY 23. Dollar General’s same-store sales fell 1.3% year over year, owing to a lower average transaction amount, partly offset by an increase in customer traffic. Same-store sales reflected declines in the home, seasonal, consumable and apparel categories. Sales increased 3.6% year over year to $ 7,940.5 million for Consumables. However, sales declined 0.2% to $940.6 million for Seasonal, 7% to $534.5 million for Home Products and 1.5% to $278.5 million for the Apparel category. Gross profit dipped 2.5% to $2,812.5 million in the reported quarter and the gross margin decreased 147 basis points to 29%. The decline in the gross margin can be attributed to lower inventory markups, increased shrink and higher markdowns, partly offset by a lower LIFO provision and decreased transportation costs. In the third quarter of fiscal 2023, Dollar General opened 263 stores, remodeled 545 stores and relocated 44 stores. In fiscal 2024, the company anticipates carrying out 2,385 real estate projects, including 800 store openings, 1,500 remodels and 85 store relocations.

DG in the third quarter of FY 23 has reported the adjusted earnings per share of $1.26, beating the analysts’ estimates for the adjusted earnings per share of $1.19, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 2.4 percent to $9.69 billion in the third quarter of FY 23, beating the analysts’ estimates for revenue of $9.65 billion.

Additionally, the company announced a quarterly dividend of 59 cents per share, payable on or before Jan 23, 2024, to shareholders of record as of Jan 9, 2024.

For fiscal 2023, management now projects net sales growth to be in the band of 1.5-2.5% versus the previous expectation of 1.3-3.3%. This includes a negative impact of about two percentage points owing to the lapping fiscal 2022 53rd week. Same-store sales growth is likely to come in the range of a decline of about 1% to flat against the previous guidance range of a 1% decline to 1% growth.

For fiscal 2023, the company now expects earnings per share to be $7.10-$7.60 or a decrease of 29-34% versus the prior expectation of about a 22-34% decline. This view includes the adverse impact of nearly four percentage points owing to higher interest expense.